In business, goods and services are sold through sales transactions such as bills, invoices, memos, etc., due to which sales transactions are very important in business. A lot of reports are generated with the help of sales transactions due to which it becomes necessary for every business to manage this. Sales transactions can be through credit, cash, and bank, etc.
Businesses which have fewer transactions can record all the transactions in a single book, but businesses where transactions are high require different books for transactions of different nature, because different books help record the same type of transactions together, making it easier to manage transactions. These various books are called subsidiary books.
Table of Contents
What is a Sales Book?
The sales book is a subsidiary book of the journal that is used to record and manage sales transactions together. Only credit and trade transactions (such as raw materials, finished goods and services) are recorded in it. All sales made through cash and bank are recorded in the cash book because the sales book records only credit transactions.
Sales of goods and services other than trade sales like sale of assets etc. are directly recorded through journals and ledgers because these types of transactions do not occur frequently and another reason is that sales book record only trade transactions.
Features of Sales Book
Following are the features of sales book:
1. Subsidiary Book:
Sales book is a subsidiary book of the journal as it is used to reduce the workload of the journal. With its help, it becomes easy to record and manage transactions. The sales book is used at the initial stage of accounting, due to which all transactions are recorded in it directly from the source documents.
2. First Step:
If the business adopts the concept of subsidiary books, then all the related transactions are recorded in the books directly related to the source documents, which is why the sales book is the first step in the recording process. For example, when sales transaction takes place, it is first recorded in the sales book.
3. Only Credit Sales:
Only credit sales are recorded in the sales book because sales other than credit sales cannot be recorded in it. If the sales transaction takes place through cash and bank, then it is recorded in the cash book.
4. Only Trade Sales:
Only trade sales are recorded in the sales book. Trade sales mean the sale of goods and services like raw materials, finished goods, etc. or sale done for the purpose of earning profit. Sales other than trade sales are not recorded in the sales book as it is not a part of the sales book.
5. Evidentiary Value
Sales book has evidentiary value as it is a part of primary data. All transactions in the sales book are recorded directly from the source documents, due to which it is valid before the law, but its evidentiary value is less than that of the source documents because it is created through the source documents.
6. Easy Management:
Sales book helps in easy management of sales transactions as only sales transactions are recorded in it and it is managed by the concerned persons who have knowledge about the sales book and sales transactions etc.
7. Error Reduction:
Using sales book helps in reducing the error as only sales transactions are recorded in it and it is managed by the concerned person who has the knowledge of it.
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QNA/FAQ
Q1. What is a Sales Book?
Ans: The sales book is a subsidiary book of the journal that is used to record and manage sales transactions together.
Q2. Are only credit sales recorded in the sales book?
Ans: Yes, only credit sales are recorded in the sales book because according to its concept only credit sales can be recorded in it.
Q3. Are only trade sales recorded in the sales book?
Ans: Yes, only trade sales are recorded in the sales book because according to its concept only trade sales like raw materials, finished goods and services, etc. can be recorded in it.
Q4. Does a sales book have evidentiary value?
Ans: Yes, sales book has evidentiary value because in it all the transactions are recorded directly from the source documents.
Q5. Write the features of sales book.
Ans: Following are the features of sales book:
1. Sales book is a subsidiary book.
2. Sales book is the first step of recording.
3. Only credit sales are recorded in the sales book.
4. Only trade sales are recorded in the sales book.
5. Sales book has evidentiary value.
6. Sales book helps in easy management.
7. Sales book helps in reducing errors.
